Hasbro keeps annual forecasts intact despite quarterly results beat

Toy maker Hasbro said it expects roughly $50 million in tariff refunds, which is not embedded in its forecast. (AP Photo/Richard Drew, File)

Hasbro on Wednesday reaffirmed its annual forecasts even as it reported first-quarter revenue and profit above estimates amid looming macroeconomic pressures, sending its shares down about eight per cent.

The Play-Doh maker joins other global firms hit by the U.S.-Israeli war with Iran, flagging about US$30 million expected in annual oil-related incremental costs linked to freight, resin and packaging.

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“The macro environment continues to require agility,” CFO Gina Goetter said in a post-earnings call, adding that the company is looking at freight optimization, product mix management, and operating spend reductions to ease the impact in the second half of the year.

CEO Chris Cocks said the reaffirmed forecast follows Hasbro’s typical practice as it is early in the year, noting that it is the “prudent move.”

Cocks expects revenue growth for its Wizards of the Coast and Digital Gaming segment, which houses its sales-driving “Magic: The Gathering” titles, to moderate in the fourth quarter following “tougher compares” to an 86 per cent jump in the same quarter last year.

“We see upside to the guide as momentum in Magic continues,” BNP Paribas analyst Xian Siew said, adding that uncertainties around the cyber-breach and broader demand remain.

Hasbro, which relies on third-party manufacturers in countries including China and Vietnam for the majority of its products, said it expects roughly US$50 million in tariff refunds, which is not embedded in its forecast.

The company had forecast its preliminary first-quarter results last month after identifying unauthorized access to its network in late March. Hasbro plans to seek reimbursement of costs and losses related to the incident from insurers.

The company’s quarterly revenue of US$1 billion beat estimates of US$964.38 million, according to data compiled by LSEG.

Sales were helped by strength in its digital gaming business, which rose 26 per cent, and helped Hasbro counter softer demand for traditional toys.

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Quarterly adjusted earnings per share of US$1.47 also beat analysts’ estimate of US$1.13.

Rival Mattel also reaffirmed its annual forecasts last month, despite a quarterly sales beat.

(Reporting by Koyena Das and Neil J Kanatt in Bengaluru; Editing by Devika Syamnath)